Plans for a full or partial merger of London’s 34 council pension funds have come a step closer, following an academic review of the funds’ investment procedures that describes them as a “ticking time bomb”.

Local-government leaders in London are due to meet on Tuesday to consider separate proposals from accountants PwC to tackle the problem.

The audit firm recommends closer co-operation between the local-authority-controlled funds, including the pooling of their £25bn of investments.

The idea has been discussed before, but Mike Taylor, chief executive of the £4bn London Pension Funds Authority, the biggest existing fund in the capital, said: “This is moving it a step closer.”

The academic review, prepared by the Pensions Institute at Cass Business School, found that most London funds are “sub-scale” with between £500m and £1bn under management.

Professor David Blake, one of the authors, said: “Local councillors are often reluctant members of pension investment committees and don’t have the financial experience to do the job effectively.”